UNITED STATES DISTRICT COURT DISTRICT OF MASSACHUSETTS

_______________________________________

DAVID KIAH,

Plaintiff,

v.

AURORA LOAN SERVICES, LLC;MORTGAGE ELECTRONIC SYSTEMS,INC.; and UNKNOWN DEFENDANTS:MERS SUBSCRIBING MEMBERS JOHNDOE AND/OR JANE DOE, 1 THRU UNKNOWN, CLAIMING ANY LEGAL OR EQUITABLE RIGHT, TITLE, ESTATE,LIEN, OR INTEREST IN THE PROPERTYDESCRIBED IN THE COMPLAINTADVERSE TO PLAINTIFF’S TITLE,

Defendants._______________________________________

))))) Civil Action No.) 10-40161-FDS)))))))))))))))

AMENDED MEMORANDUM AND ORDER ON DEFENDANTS’ MOTION TO DISMISS

SAYLOR, J.

This action arises out of an attempted foreclosure on plaintiff David Kiah’s property by

Aurora Loan Services, LLC. Plaintiff is proceeding pro se.

Kiah originally filed this complaint in Land Court on July 21, 2010. It was removed to

this Court by defendants on the basis of diversity jurisdiction. Kiah seeks a declaratory judgment

that “the mortgage on record [is] legally null and void.” (Compl. ¶ 76). He also seeks $20,000 in

damages from Aurora plus court costs and attorney’s fees. (Id. ¶¶ 77-78).

On September 17, 2010, defendants moved to dismiss for failure to state a claim upon

which relief can be granted. Plaintiff filed motions styled as motions for judgment on the

Kiah v. Aurora Loan Services, LLC et al Doc. 50

Dockets.Justia.com

22

pleadings, examination of title, and endorsement of lis pendens on September 28, 29, and 30,

respectively. On November 16, this Court granted defendants’ motion to dismiss the complaint

for failure to state a claim and denied plaintiff’s motions as moot.

This is an amended order arising from an intervening clarification of the law. Kiah has

filed motions for reconsideration and to set aside the judgment pursuant to Fed. R. Civ. P. 60(b).

On January 7, 2011, the Massachusetts Supreme Judicial Court issued its opinion in U.S. Bank

Nat’l Ass’n v. Ibanez, 458 Mass. 637 (2011). That decision, among other things, clarifies the

requirements for mortgage foreclosures in Massachusetts.

After considering Ibanez and the arguments of the parties, the Court concludes that

dismissal was proper. For the reasons stated below, plaintiff’s motions for reconsideration and to

set aside the judgment will be denied, and the Court’s previous order, in amended form, will

remain in place.

In essence, the documents submitted by plaintiff with his complaint — such as the

mortgage and the mortgage assignment — directly contradict his theories of recovery, and he has

neither made sufficient allegations of fraud to satisfy the requirements of Fed. R. Civ. P. 9(b) nor

made allegations sufficient to raise a right to relief above the level of sheer speculation.

I. Statement of Facts

A. The Mortgage Loan

On May 24, 2007, David Kiah executed and delivered a promissory note in the amount of

$180,000. (Compl. Ex. A). The note was secured by a mortgage on his property at 229 Gardner

Road in Hubbardston, Massachusetts. The mortgagee was Mortgage Electronic Registration

Systems, Inc. (“MERS”). (Id.). The mortgage was executed that day and recorded at the

1 Plaintiff provided an explanation of MERS’s role in the mortgage market as an exhibit to his complaint. (See Def. Notice of Removal Ex. 4). According to plaintiff, the purpose of MERS is to act as the mortgagee ofrecord for mortgage loans that are registered in its system. (Id.). It records the mortgage and tracks ownership ofthe lien. (Id.). When the promissory note is sold (and possibly re-sold) in the secondary mortgage market, theMERS database tracks that transfer. (See id.). Mortgage lenders and other entities subscribe to the MERS systemand pay annual fees for the electronic processing and tracking of ownership and transfers of mortgages. (Id.) Members contractually agree to appoint MERS to act as their common agent on all mortgages they register in theMERS system. (Id.). As long as the parties involved in the sale are members, MERS remains the mortgagee ofrecord (thereby avoiding recording and other transfer fees that are otherwise associated with the sale) andcontinues to act as an agent for the new owner of the promissory note. (Id.). To facilitate the execution ofassignments from MERS, MERS regularly designates “certifying officers,” who are typically employees of MERSmember firms. See In re Moreno, 2010 WL 2106208, at *2 (Bankr. D. Mass. May 24, 2010). MERS authorizesthese employees, through formal corporate resolutions, to execute assignments on its behalf. Id.

For a discussion of MERS and its functions, see MERSCORP, Inc. v. Romaine, 8 N.Y.3d 90 (N.Y. 2006).

33

Worcester South Registry of Deeds. (Compl. ¶ 2, Ex. A).

According to the terms of the mortgage, “MERS is a separate corporation that is acting

solely as a nominee for Lender [defined as “First Magnus Financial Corporation”] and Lender’s

successors and assigns.” (Compl. Ex. A).1

According to the closing instructions, the “Investor” (presumably, the source of the funds)

was Lehman Brothers Bank, FSB. (Compl. Ex. D).

B. The Assignment of the Note and Mortgage

First Magnus filed for bankruptcy on August 21, 2007, and was administratively dissolved

on April 2, 2009. (Compl. ¶¶ 8-9, Ex. C). It appears that the mortgage loan was securitized; in

any event, it is undisputed that the current owner of the debt is presently the Federal National

Mortgage Association (“Fannie Mae”). (Compl. ¶¶ 37-44, Ex. G). The loan is being serviced by

Aurora Loan Services, LLC. (Id.).

Plaintiff disputes the assignment of the mortgage. It is undisputed that Aurora presently

possesses the note and has the right to enforce the note. (Def. Opp’n to Remand at 2, Ex. B; Pl.

2 Plaintiff and defendants presented two different versions of the note as exhibits to their pleadings. Thenote attached to plaintiff’s complaint is endorsed “in blank.” (Compl. Ex. A). The note presented by defendantscontains an endorsement to Aurora. (Def. Opp’n to Remand Ex. B). Kiah, however, does not dispute that Aurorais currently in possession of the note and has a “substantive right to enforce the note and mortgage as a holder.” (Pl. Mot. for Recons. at 18). He also does not request a declaration that the transfer of the note to Aurora is void. (See Compl. ¶¶ 76-80).

3 According to defendants, such an assignment is generally not recorded unless the loan goes into default. (Compl. Ex. F; Def. Mot. to Dismiss at 5).

44

Mot. for Recons. at 18).2

Aurora alleges that the note and mortgage were assigned to it in June 2007. (Def. Mot. to

Dismiss at 5; Def. Opp’n to Remand Ex. D). At that time, no assignment of mortgage was

recorded at the Registry of Deeds. (Def. Mot. to Dismiss at 5).3

At some point before January 2010, Kiah stopped making payments on the mortgage, and

the loan went into default. Aurora then initiated steps to foreclose on the property.

Plaintiff has attached to the complaint a document entitled “Corporate Assignment of

Mortgage.” (Compl. Ex. B). The assignment states that the assignor is MERS (as “nominee for

First Magnus Financial Corporation . . . it’s [sic] successors and assigns”) and that the assignee is

Aurora. (Id.). The “Date of Assignment” is listed as January 6, 2010. (Id.).

The document also states that the “Effective Date” of the assignment is June 9, 2007—a

little more than two weeks after the note and mortgage were executed. (Id.). That assignment

was recorded in the Worcester South Registry of Deeds on January 19, 2010. (Id.).

C. Land Court Proceedings

On January 20, 2010, Aurora filed a complaint in Land Court seeking a judgment that

Kiah is not in active military service and is not entitled to the protections of the Service Members

4 The SMCRA prohibits filing of civil suits against active duty services members and service memberswho had been on active duty in the prior year.

5 Because a notice of appeal has been filed, the Court’s review of these motions is governed by theprocedures set forth in Puerto Rico v. SS Zoe Colocotroni, 601 F.2d 39, 42 (1st Cir. 1979). Under Colocotroni,the Court may assess post-judgment motions and dismiss them if they are without merit. Id. If the court cannotdispose of such motions without further consideration, however, it must issue a brief memorandum taking those

55

Civil Relief Act, 50 App. U.S.C. § 533.4 After Kiah challenged Aurora’s standing to bring such

an action, Aurora produced the note and recorded the assignment of the mortgage. See Aurora

Loan Servs., LLC v. David Kiah, No. 10 MISC 420743 (HMG), 2-3 (Mass.\ Land Ct. Sept. 8,

2010). As a result, the Land Court found that Aurora was the current holder of the promissory

note and assignee of record of the mortgage.

On July 23, 2010, Kiah filed suit against Aurora and MERS in Land Court seeking to

invalidate the mortgage and demanding damages for fraudulent conveyance and slander of title.

On August 20, 2010, Aurora and MERS removed the lawsuit to this Court.

On September 30, 2010, Kiah filed a Chapter 13 bankruptcy petition. His bankruptcy

petition was dismissed on October 7 for failure to file a Chapter 13 plan within the time provided

by the court.

On November 16, this Court granted defendants’ motion to dismiss the complaint for

failure to state a claim, and Aurora foreclosed on November 22. On the same day, plaintiff filed a

motion for reconsideration. He then filed a notice of appeal on December 10. Finally, on

December 23, he filed a motion in this Court to set aside the judgment pursuant to Fed. R. Civ. P.

60(b).

On January 7, 2011, the Massachusetts Supreme Judicial Court issued the Ibanez opinion,

and the Court subsequently issued a memorandum taking plaintiff’s post-judgment motions under

advisement.5

motions under advisement and stating the number of additional days required to complete its review and issue anorder. The issuance of the Ibanez decision prompted the Court to issue such a memorandum here.

66

II. Standard of Review

On a motion to dismiss, the court “must assume the truth of all well-plead[ed] facts and

give the plaintiff the benefit of all reasonable inferences therefrom.” Ruiz v. Bally Total Fitness

Holding Corp., 496 F.3d 1, 5 (1st Cir. 2007) (citing Rogan v. Menino, 175 F.3d 75, 77 (1st Cir.

1999)). Materials attached to a complaint, or incorporated by reference, are a part of the pleading

itself, and the Court may consider them on a motion to dismiss. Trans-Spec Truck Serv., Inc. v.

Caterpillar, Inc., 524 F.3d 315, 321 (1st Cir. 2008). To survive a motion to dismiss, the

complaint must state a claim that is plausible on its face. Bell Atl. Corp. v. Twombly, 550 U.S.

544, 570 (2007). That is, “[f]actual allegations must be enough to raise a right to relief above the

speculative level, on the assumption that all the allegations in the complaint are true (even if

doubtful in fact).” Id. at 555 (citations omitted). Dismissal is appropriate if plaintiff’s well-

pleaded facts do not “possess enough heft to show that plaintiff is entitled to relief.” Ruiz Rivera

v. Pfizer Pharms., LLC, 521 F.3d 76, 84 (1st Cir. 2008) (quotations and textual alterations

omitted).

As noted above, this order has been amended in response to plaintiffs motion to set aside

judgment pursuant to Fed. R. Civ. P. 60(b). The evaluation of a motion for reconsideration

brought pursuant to Rule 60(b) is “committed to the district court’s sound discretion.” Stonkus v.

City of Brockton Sch. Dep’t, 322 F.3d 97, 100 (1st Cir. 2003). The rule provides several grounds

for relief from a judgment or order, including “mistake, inadvertence, surprise, or excusable

neglect,” and “any other reason that justifies relief.” Fed. R. Civ. P. 60(b)(1), (60)(b)(6).

Motions under this rule are ordinarily granted only when exceptional circumstances are present,

77

but “district courts have broad discretion to determine whether such circumstances exist.” Ahmed

v. Rosenblatt, 118 F.3d 886, 891 (1st Cir. 1997). The contours of Rule 60(b)(6), the “catch-all”

provision, are “particularly malleable,” and the Court’s “decision to grant or deny such relief is

inherently equitable in nature.” Ungar v. Palestinian Liberation Org., 599 F.3d 79, 83, 84 (1st

Cir. 2010).

III. Analysis

In his complaint, plaintiff essentially contends that MERS did not have the power to assign

the mortgage to Aurora and that Aurora therefore cannot foreclose on the property because it is

not the mortgagee. As noted, he does not dispute Aurora’s possession of the note or challenge

Aurora’s substantive right to enforce the note. He sets forth multiple theories of recovery, as

discussed below.

A. Whether the Mortgage and Assignment Are Void Because MERS Had NoLegal Power to Act for First Magnus’ “Successors and Assigns”

Plaintiff contends that First Magnus declared bankruptcy, and was dissolved, before the

mortgage was assigned to Aurora; that MERS could not act on behalf of a non-existent entity;

and that therefore MERS did not have the legal power to transfer the mortgage to Aurora. He

further asserts that the assignment of the mortgage and the mortgage itself are void as a result.

Defendant contends that the assignment of the mortgage actually occurred in June 2007,

but simply was not recorded until January 2010. In any event, plaintiff cannot succeed on his

theory, because he does not challenge the validity of the assignment of the note to Aurora. That

admission is fatal to his claim. By law, the transfer of the note automatically transfers an equitable

interest in the underlying mortgage, even without a formal assignment. U.S. Bank Nat’l Ass’n v.

Ibanez, 458 Mass. 637, 652 (2011) (“[T]he holder of the mortgage holds the mortgage in trust for

6 As Ibanez makes clear, however, a mere equitable right to the mortgage is not enough to foreclose on aproperty. “In Massachusetts, where a note has been assigned but there is no written assignment of the mortgageunderlying the note, the assignment of the note does not carry with it the assignment of the mortgage.” Ibanez,458 Mass. at 652. To foreclose, the note holder must first exercise its equitable right to obtain the mortgagethrough a “valid written assignment . . . or a court order of assignment.” Id. at 653.

88

the purchaser of the note, who has an equitable right to obtain an assignment of the mortgage. .

.”); see also Carpenter v. Longan, 83 U.S. 271, 275 (1872) (“The transfer of the note carries with

it the security, without any formal assignment or delivery, or even mention of the latter. If not

assignable at law, it is clearly so in equity.”). An equitable right to the mortgage was therefore

transferred to Aurora along with the note.6 Plaintiff’s theory that the note and the mortgage

somehow became disconnected from one another, and that the mortgage should disappear as a

result, is therefore not tenable as a matter of law.

In any case, and as plaintiff also acknowledges, MERS had the power to act as the agent

of any valid note holder under the terms of the mortgage documents. The plain language of the

mortgage states that MERS was acting as nominee for First Magnus and its “successors and

assigns.” (See Compl. Ex. A). First Magnus’ dissolution would not prevent its successors and

assigns, including Aurora, from seeking transfer of the mortgage from MERS.

Accordingly, the dissolution of First Magnus would not and could not prevent Aurora

from obtaining an assignment of the mortgage from MERS, both as a matter of law and according

to the arrangement that existed between MERS and Aurora as a “successor and assign” of First

Magnus. The complaint alleges no plausible basis to conclude otherwise, and accordingly this

theory is without merit and fails to state a claim.

B. Whether First Magnus Could Have Transferred the Mortgage to AnyoneOther Than Lehman Brothers

Plaintiff next contends that Lehman Brothers Bank, FSB acquired the note by transfer

99

from First Magnus shortly after closing and paid a premium for the note over its face value.

(Compl. ¶ 28). Plaintiff contends that once “First Magnus . . . sold its interest[,] MERS could not

sell or transfer it again on behalf of First Magnus.” (Compl. ¶ 30).

The premise of this claim appears to be that First Magnus and/or MERS somehow

attempted to sell the same note twice. But that is not what the exhibits submitted by plaintiff

show. According to plaintiff’s own allegations, Lehman Brothers acquired the debt from First

Magnus. But even assuming that Lehman actually acquired the note (as opposed to, for example,

the contractual right to receive payment on the obligation), it does not follow that MERS thereby

lost any capacity to act. Indeed, MERS was expressly granted the right to act on behalf of First

Magnus and its “successors and assigns.” Accordingly, even assuming that First Magnus sold its

interest in the note to Lehman, MERS retained the power to transfer the mortgage on behalf of

Lehman as First Magnus’s successor. In other words, the mortgage explicitly granted MERS the

power that plaintiff claims it did not have.

The complaint offers no plausible allegations as to why that provision should be

disregarded. As to that theory, therefore, the complaint fails to state a claim upon which relief

can be granted.

C. Whether the Assignment of Mortgage Was Fraudulent

Plaintiff and defendants agree that Aurora is the servicer and therefore has both “the right

to enforce the Note and . . . the right to receive payment of the debt on behalf of [the owner of

the debt].” (Compl. ¶ 32; Def. Mot. to Dismiss at 6). Plaintiff, however, contends that Aurora

cannot be the mortgagee if another entity owns the debt and that the assignment of mortgage to

Aurora is therefore fraudulent. (Compl. ¶¶ 33-36, 39-44).

1010

Plaintiff appears to misapprehend the role of a servicing agent. As servicer, Aurora acts

on behalf of the owner of the debt—in this case, Fannie Mae. See Peoples Mortg. Co. v. Federal

Nat’l Mortg. Ass’n, 856 F. Supp. 910, 917-18 (E.D. Pa. 1994). As the servicer, Aurora has the

right to foreclose on the mortgage on Fannie Mae’s behalf. See In re O’Kelley, 2010 WL

3984666, at *1 (D. Haw. Oct. 8, 2010). Indeed, Fannie Mae often requires servicers to initiate

legal proceedings in the servicer’s name if the servicer or MERS is the mortgagee of record. Id.

After the servicer forecloses, Fannie Mae generally requires the servicer to convey title of the

property to it. Id. Therefore, Aurora, as Fannie Mae’s agent, has the right both to collect on the

debt and to foreclose on the mortgage. See id.

Plaintiff also contends that the assignment was “an act of fraudulently conveying and

slandering Plaintiff’s title in furtherance of a conspiracy to conceal the trading of the note.”

(Compl. ¶ 35). To the extent the complaint is alleging a claim of fraud, it does not meet the

pleading requirements of Fed. R. Civ. P. 9(b). Among other things, the complaint must “[a]t a

minimum . . . allege the time, place and contents of the alleged misrepresentation, as well as the

identity of the person making them.” Petricca v. Simpson, 862 F. Supp. 13, 15-16 (D. Mass.

1994) (citing Keith v. Stoelting, Inc., 915 F.2d 996, 1000 (5th Cir. 1990). Read liberally, this

claim alleges that Aurora—the servicer—misrepresented (presumably to MERS or to Fannie

Mae) that it had the right to foreclose on the mortgage and thereby obtained the assignment of

mortgage fraudulently. (Compl. ¶¶ 32-33). As noted above, Aurora, as servicer for Fannie Mae,

appears to have the right to collect on plaintiff’s note and to foreclose on his mortgage. There is

simply nothing in the complaint that would plausibly suggest that the assignment to Aurora was

procured by fraud.

7 The assignment of mortgage recites consideration of ten dollars. (Compl. ¶¶ 46-52, Ex. B).

1111

In short, there is nothing illegal or improper in the fact that Aurora acts as a servicing

agent, and the complaint makes out no plausible claim that anything in the arrangement between

Aurora and Fannie Mae is illegal or improper. As to that theory, therefore, the complaint fails to

state a claim upon which relief can be granted.

D. Whether the Use of the Term “Successors and Assigns” Was Valid

As noted, the mortgage and assignment state that MERS is the nominee for First Magnus

and its “successors and assigns.” (Compl. Ex. B). Plaintiff contends that the phrase “successors

and assigns” cannot be used “as a wildcard for whatever (undisclosed) person is the current

holder of the note.” (Compl. ¶ 45). Plaintiff argues that the mortgage and the assignment are

voidable because they misrepresent the parties to the contract. (See id.).

There is nothing in the use of the commonplace phrase “successors and assigns” that

suggests any fraud or other impropriety. The phrase simply makes clear that the note and

mortgage may be assigned and that MERS may continue to act as an agent for the new owners.

Furthermore, plaintiff does not allege that the use of the term induced him to enter into the

contract, or that he justifiably relied on the alleged misrepresentation. See Commerce Bank &

Trust Co. v. Hayeck, 46 Mass. App. Ct. 687, 692 (1999). To the extent that the complaint rests

on this theory, it fails to state a claim upon which relief can be granted.

E. Whether the Assignment Is Void for Lack of Consideration

Plaintiff further contends that the assignment of mortgage was without consideration and

is therefore void.7 Under the circumstances presented here, this is nothing more than sheer

speculation, with no specific facts to support it. Furthermore, and in any event, it is difficult to

8 Plaintiff also asserts that the backdating of the document is “part of the scheme and conspiracy offraudulent conveyance.” (Compl. ¶ 56). As noted above, for an allegation of fraud to survive a motion to dismiss,plaintiff must “allege the . . . contents of the alleged misrepresentation.” Petricca, 862 F. Supp. at 15-16. Readliberally, this claim alleges that Aurora misrepresented the date on which it actually was assigned the mortgage. Aurora, however, did not misrepresent anything, as it disclosed both the “date of assignment” and the “effectivedate” on the assignment of mortgage, and there is no claim of justifiable reliance on the part of plaintiff. Therefore, this claim fails to state any allegations of fraud at all, much less allegations sufficient to satisfy theheightened pleading requirements of Rule 9(b). See Fed. R. Civ. P. 9(b).

1212

see why plaintiff has standing to assert such a claim, and how in any event he has suffered a

compensable injury if the consideration was not paid. Such implausible allegations are insufficient

to survive a motion to dismiss.

F. Whether the Assignment Is Invalid Because It Is Backdated or Because theAssignor Lacked Signatory Authority

The assignment of mortgage has a “Date of Assignment” of January 6, 2010, but an

“Effective Date” of June 9, 2007. Plaintiff contends that the assignment of mortgage was

therefore backdated, and that this “backdating” “lacks economic substance[,]” is “frivolous[,]”

and should be disregarded. (Compl. ¶¶ 53-58).

Defendants contend that the assignment occurred in June 2007, and simply was not

recorded until January 2010. But even if the Court assumes the assignment occurred in January

2010 instead of June 2007, plaintiff’s theory fails. Massachusetts law requires only that the

assignment of mortgage be executed and recorded prior to the publication of the notice of sale.

See Ibanez, 458 Mass. at 651 (noting that Massachusetts requires a foreclosing party have a valid

assignment of mortgage at the time of notice and sale, but does not require assignment to be “in

recordable form” at that time). The backdating thus has no legal effect, at least in this context.8

In his motion to set aside the judgment, plaintiff asserts a new and alternative theory that

the mortgage assignment was ineffective because MERS’ signing officer, Theodore Schultz,

9 Plaintiff contends that the exhibits related to Schultz’s signatory authority are a “fraud on the court.” (Def. Mot. to Set Aside J. at 2). It is unclear, however, how the Court has been the subject of a fraud. The relevantdocuments appear to have been created in accordance with MERS practices for authorizing and assigningmortgages. (See Def. Opp’n to Mot. to Set Aside J. at 6); see also In re Jessup, 2010 WL 2926050, at *3 (Bankr.E.D. Ky. July 22, 2010). While those practices are arguably unusual, the Court does not appear to have beenmisled by the filings, and other courts have relied on similar assignments from MERS. See In re Lopez, 2011 WL576820, at *5 (Bankr. D. Mass. Feb. 9, 2011) (MERS assignment system creates “a complete and facially validchain of title establishing that it holds the Mortgage”); In re Moreno, 2010 WL 2106208, at *2-4 (Bankr. D. Mass.May 24, 2010) (suggesting MERS transfer system is valid where MERS officer is an employee or agent of the noteholder); see also In re Mortg. Elec. Registration Sys. (MERS) Litigation, 2011 WL 251453, at *8 (D. Ariz. Jan. 25,2011) (“The MERS system is not fraudulent, and MERS has not committed any fraud.”); Golliday v. Chase HomeFinance, LLC, 2011 WL 31038, at *1 (W.D. Mich. Jan. 5, 2011) (assignment of mortgage using MERS systemwas valid absent further evidence of fraud); In re Jessup, 2010 WL 2926050, at *6 (Bankr. E.D. Ky. July 22, 2010)(MERS assignments are valid where a person has been appointed under the MERS system or where the transfer issubsequently ratified by MERS); Randle v. GMAC Mortg., LLC, 2010 WL 3984714, at *1 (Mass. Land. Ct. Oct.12, 2010) (treating MERS assignment as valid without describing details of that assignment); Amtrust Bank v. TDBanknorth, N.A., 2010 WL 1019638, at *1 (Mass. Land Ct. Mar. 22, 2010) (same). But see HSBC Bank USA, N.A.v. Yeasmin, 2010 WL 2089273, at *6 (N.Y. Sup. Ct. May 24, 2010) (calling the MERS assignment system “themortgage twilight zone” and comparing it to a “journey into a wondrous land of imagination”); Aurora LoanServs., LLC v. Judith Mendes da Costa, No. 09-142-CA, 3 (Fla. Cir. Ct. Apr. 28, 2010) (“MERS has nosubstantive rights itself, and, therefore, cannot assign what it does not have.”).

1313

lacked signatory authority at the time of the assignment to Aurora. Plaintiff contends that the

assignment—and, by extension, the foreclosure sale—are void.

This argument is also without merit. First, Schultz appears to have had signatory

authority on the date of the assignment. Defendants have submitted a MERS “Corporate

Resolution” that predates the assignment and grants such authority to an “attached list of

candidates,” including Schultz. (See Def. Opp’n to Mot. to Set Aside J. Ex. C).9 This is

confirmed by the fact that MERS, a defendant in this case, does not contest the assignment.

Second, even if Schultz lacked the authority to assign the mortgage, this would not

invalidate the assignment under Massachusetts law. Mass. Gen. Laws ch. 183 § 54B provides:

Notwithstanding any law to the contrary, a[n] . . . assignment of mortgage . . . if executedbefore a notary public, justice of the peace or other officer entitled by law to acknowledgeinstruments, whether executed within or without the commonwealth, by a personpurporting to hold the position of . . . vice president, . . . secretary, . . . or other similaroffice, including assistant to any such office or position, of the entity holding suchmortgage, or otherwise purporting to be an authorized signatory for such entity . . . shall

1414

be binding upon such entity . . . .

Mass. Gen. Laws. ch. 183 § 54B. It is undisputed that Shultz purported to be a vice president

and assistant secretary of MERS at the time of the assignment and supported this with a

“Corporate Resolution” from the Board of Directors of MERS. (See Def. Opp’n to Mot. to Set

Aside J. Ex. C). Furthermore, the assignment was executed before a notary public. (See Compl.

Ex. B). In this case, the clear language of § 54B provides that the assignment would be binding.

Ibanez does not require a different result. In Ibanez, the Massachusetts Supreme Judicial

Court held that a foreclosure sale made by a party who holds the note but not the mortgage is

void as a matter of law. 458 Mass. at 656-57. In that case, the note holders provided no

evidence of assignment prior to foreclosure. Id. at 642-44. Here, there was a facially valid

assignment of the mortgage from MERS to Aurora prior to the foreclosure sale. See In re Lopez,

2011 WL 576820, at *5 (Bankr. D. Mass. Feb. 9, 2011) (suggesting that lack of signatory

authority would be a “latent defect[]” that could not interrupt a “facially valid chain of title

establishing that [assignee] holds the Mortgage”). To the extent the assignment is defective,

Ibanez would require, at most, that a confirmatory assignment be executed and recorded. See

Ibanez, 458 Mass. at 654.

G. Whether MERS Could Have Assigned the Mortgage

Plaintiff further contends that an assignment of a mortgage is invalid unless the note is

transferred with it. (Compl. ¶¶ 59-73). He alleges that MERS could not have assigned the

mortgage because it never had physical possession of or a beneficial interest in the note, and

therefore that the assignment of the mortgage to Aurora is void. (Compl. ¶¶ 70, 73) (citing

Carpenter, 83 U.S. at 274).

1515

“[T]he holder of the mortgage holds the mortgage in trust for the purchaser of the note,

who has an equitable right to obtain an assignment of the mortgage.” Ibanez, 458 Mass. at 652;

Boruchoff v. Ayvasian, 323 Mass. 1, 10 (1948) (“[W]here a mortgage and the obligation secured

thereby are held by different persons, the mortgage is regarded as an incident to the obligation,

and, therefore, held in trust for the benefit of the owner of the obligation.”). Even if MERS never

had possession of or a beneficial interest in the note, this claim must fail because MERS was

holding the mortgage in trust for Aurora. See id. The assignment of mortgage, therefore, would

still be valid.

Plaintiff also alleges that MERS never had a beneficial interest in the mortgage and

therefore did not have legal capacity to assign it. (Compl. ¶ 67). MERS is the “nominee” for

First Magnus’s successors and assigns. (Compl. Ex. A). A “nominee” is a “person designated to

act in place of another, usu[ally] in a very limited way” or a “party who hold bare legal title for the

benefit of others.” Black’s Law Dictionary 1076 (8th ed. 2004); see Landmark Nat’l Bank v.

Kesler, 289 Kan. 528, 538 (2009) (summarizing various opinions concerning the role of MERS).

Therefore, even though MERS does not have a beneficial interest in the property, it nonetheless

could have transferred the mortgage on its behalf of the beneficial owner. See id.

Again, plaintiff’s claims are contradicted by the very documents that he submitted with the

complaint, and there is no plausible basis to suggest that those documents should be disregarded.

H. Whether There Was a Fraudulent Conveyance and Slander of Title

Finally, plaintiff contends generally that the assignment of mortgage from MERS to

Aurora was a fraudulent conveyance and slander of title. (Compl. ¶ 75). He does not, however,

allege with specificity the circumstances constituting that fraud as required by Rule 9(b). Fed. R.

10 None of plaintiff’s remaining arguments in his motions for reconsideration and to set aside thejudgment merit relief from the Court’s dismissal of the complaint. Under these circumstances, the Court declinesto exercise its discretion under Fed. R. Civ. P. 60(b) to afford plaintiff relief from its prior judgment. Accordingly,plaintiff’s motions for reconsideration and to set aside the judgment will be denied, and the order grantingdefendants’ motion to dismiss will remain in place.

1616

Civ. P. 9(b); Hayduk v. Lanna, 775 F.2d 441, 444 (1st Cir. 1985) (noting that mere allegations of

fraud cannot satisfy the particularity requirement, “no matter how many times such accusations

are repeated”). These theories accordingly will not support a claim for relief.10

IV. Conclusion

For the foregoing reasons, defendants’ motion to dismiss is GRANTED. Plaintiff’s

motions for judgment on the pleadings, title examination, and endorsement of lis pendens are

DENIED as moot. Plaintiffs’ motion for reconsideration and motion to set aside judgment are

DENIED.

So Ordered.

/s/ F. Dennis Saylor F. Dennis Saylor IVUnited States District Judge

Dated: March 3, 2011